What annual net revenue must each jet produce

Assignment Help Econometrics
Reference no: EM13197067

Southwest Airlines (SWA) is planning to expand its fleet of jets to replace some old planes and to expand its routes. It has received a proposal from Boeing to purchase some old planes and to expand its routes. It has received a proposal to purchase 112 737's over the next 4 years. What annual net revenue must each jet produce to break even on its operating cost? The analysis should be done by finding the EUAC for the 10-year planned ownership period. SWA has a MARR of 12%, purchases the jet for $22 million, has operating and maintenance costs of $3.2 million the first year, increasing 8% per year, and performs a major maintenance upgrade costing $4.5M at end of Year 5. Assume the plane has salvage value at the end of Year 10 of $13 million.

Reference no: EM13197067

Questions Cloud

Define galactose is concentrated in a cell by a transporter : Galactose is concentrated in a cell by a transporter driven by ATP hydrolysis. What is the ratio of ADP to ATP required to maintain a galactose concentration gradient of 100,000:1
Prepare a statement of financial position for abc ltd : Prepare a statement of financial position for ABC ltd as at 30 June 2012 to comply with AASB 101 and prepare a statement of changes in equity for ABC ltd for the year ended 30 June 2012, according to the requirements of AASB 101.
What is the volume of grain that can be stored in the silo : A grain silo has a cylindrical shape. Its diameter is16FT , and its height is 47FT . What is the volume of grain that can be stored in the silo?
Define glucose transport in the liver cells of animal : In a healthy wild type animal the Km (KT) of the glucose transporter (GLUT2) present in liver cells is 15 mM. What would happen to glucose transport in the liver cells of animal that expressed only a mutant GLUT2 protein with a Km of 1mM
What annual net revenue must each jet produce : Southwest Airlines (SWA) is planning to expand its fleet of jets to replace some old planes and to expand its routes. It has received a proposal from Boeing to purchase some old planes and to expand its routes. It has received a proposal to purcha..
Define ecg electrode used to monitor a patient in the icu : Explain what will happen when the Ag/AgCl gel of an ECG electrode used to monitor a patient in the ICU dries
What is the combination that minimize the cost of production : Suppose the price of labor is w=36 and price of capital is r=64. Graph the isoquant associated with 12 units of output, and on the same graph, graph the isocost line associate with producing 12 units of output when the firm minimizes the cost of p..
How far is it from its starting position : A car travels along a straight road, heading east for 1 h, then traveling for 30 min on another road that leads northeast. If the car has maintained a constant speed of 62 mi/h, how far is it from its starting position? Round your answer to 2 deci..
Find the dimensions of the field that has the maximum area : A farmer has 300 meters of fencing. The fencing is to be used to enclose a rectangular field and to divide it in half. Find the dimensions of the field that has the maximum area.

Reviews

Write a Review

Econometrics Questions & Answers

  What is probability that any randomly chosen phone is dull

Suppose cell phones are available in two basic types: Flashy or Dull. Furthermore, suppose cell phone owners fall into two basic categories: Hipsters or Grannies. Let .55 be the probability of being a Hipster. Also, 40% of cell phones are both Flas..

  Is the sales tax progressive or regressive

Assuming a 10 percent sales tax is levied on all consumption, complete the following table: Sales Percent ofIncome Consumption Tax Income Paid in Taxes $10,000 $12,000 20,000 18,000 40,000 32,000 80,000 60,000

  How the analyst could use the data to predict gross benefits

Predict gross benefits if admission is set at $1.00 and Dryville has marginal excess tax burden of 0.25. In answering this question, assume that the fees are used to reduce taxes that would otherwise have to be collected from the citizens of Dryvi..

  Derive the equilibrium in quantities

where a > 1. In addition assume that the firms target own profit maximization, compete (simultaneously) in quantities and have marginal costs equal to c1 = c2 = c. Assume that 1 > c > or equal to 0. Describing the necessary mathematical steps, and..

  Calculate and interpret the own price and cross price

The daily demand for Invigorated PED shoes is estimated to be where Ax represents the amount of advertising spent on shoes (X), Px is the price of good X, Py is the price of good Y, and M is average income.

  Question about cpi calculation

Assume that the price index is one hundred and a typical basket of goods and services cost $8. Within the basket, you had four hamburgers and 3 hot dogs.

  Define firms production function

For the isocost line, clearly identify the vertical and horizontal intercepts. For the isoquant, clearly identify 5 combinations of Labor and Capital that will produce Q = 20 (including the bundle that minimizes the firm's cost of production). M..

  Find an ad-valorem tax that would generate revenues

In a competitive market, the industry demand and supply curves are P=200-0.2×Qd and P=100+0.3×Qs, respectively. Can you find an ad-valorem tax that would generate $3200 of revenues for the government

  What is the companys fixed cost

How many units should be produced to maximize profit? How do this company's marginal costs behave as output increases? Provide a logical explanation as to why a computer manufacturer's marginal costs might behave in this way.

  What is the opportunity cost of moving from producing

Maximum possible combinations of food and clothing that can be produced in a given period of time: Units of food (millions) Units of clothing (millions)Draw a PPF for this economy. b. What is the opportunity cost of moving from producing 4 mi..

  Determine the interest rate compounded qarterly

determine the present equivalent value of $400 paid every three months over a period of seven years in each of the follwing situations: a) the interest rate is 12% componded annualy. b) the interest rate is 12% compounded qarterly.

  Describe their pricing practices

Describe the fundamental difference between short-run analysis and long-run analysis of the cost structure of a firm and give at least two examples of industries that practice price discrimination, and describe their pricing practices.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd